(Bloomberg) — Credit Suisse Group AG canceled a plan to back star trader Hamza Lemssouguer’s credit fund in a stunning about-face as it dials back risk after the implosion of Archegos Capital Management and Greensill Capital.

The Swiss lender agreed with Lemssouguer that he should take his Arini European Credit fund outside the bank, according to an internal memo seen by Bloomberg. Credit Suisse will not invest any money or retain an ownership stake, said a person familiar with the matter.

Sofia Rehman, a spokeswoman for the bank in London, confirmed the memo’s contents. The fund launch had already been delayed as the bank re-evaluated its “risk appetite” for using its own cash to seed new funds, according to the memo.

Lemssouguer had been one of the most prominent traders at the Swiss bank, generating millions of dollars of revenue from dealing in distressed debt and derivatives, and was set to leave for Ken Griffin’s hedge fund Citadel last year. Credit Suisse lured him back by giving him a new role overseeing the launch of a credit strategy in the asset-management division, targeting as much as $500 million in assets and pledging to invest its own money to help get the fund off the ground.

But the Swiss lender soon after became engulfed in a crisis of confidence triggered by the unraveling of supply-chain finance firm Greensill and the collapse of Bill Hwang’s family office Archegos, events that have rocked the bank and cost it billions of dollars. The debacles prompted sweeping changes by Chief Executive Thomas Gottstein, who cut the dividend, overhauled leadership and is considering spinning off the asset-management unit. The arrival of new chairman Antonio Horta-Osorio in April is also likely to hasten change.

Credit Suisse fell 0.9% at 2:26 p.m. in Zurich trading, bringing losses this year to 15%, the worst among the large European lenders.

The bank is curbing risk across various businesses, including at the lucrative prime brokerage unit which services hedge funds and investment firms such as Archegos. The Swiss lender in recent weeks has also cut ties with Japanese conglomerate SoftBank Group Corp., a key backer to Lex Greensill’s empire.

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The asset-management unit that was supposed to house Lemssouguer’s fund played a prominent role in the crisis at Credit Suisse. The division worked with Greensill to create a $10 billion suite of supply-chain finance funds with links to troubled steel mogul Sanjeev Gupta, in spite of warnings from executives elsewhere in the bank at the time.

Greensill collapsed in March and Credit Suisse has since shuttered the funds. The bank replaced Eric Varvel, head of the asset management business, placed senior managers on leave, while Chief Risk Officer Lara Warner departed.

Lemssouguer has already held investor presentations to raise money for his absolute return credit fund, which aims to take advantage of distortions in credit markets with long and short positions, stressed opportunities, and the capability to single-name shorting, according to a presentation.

The junk bond market has been a favorite of fund managers this year who are willing to take bigger risks in search for yield as central banks keep supporting markets, though expectations for higher inflation may complicate such trades.

“Hamza and the Arini team have engaged with clients and would like to capitalize on current dislocations in European credit,” according to the bank. “Given the timing, we have agreed with Hamza that it would be in the best interest of prospective investors and the team for Arini to proceed outside of Credit Suisse.”

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